⭐ Morning Briefing — October 16, 2026

(Friday, October 16, 2026)

Top Story: Attorney General Ken Paxton has sent letters to 156 data center developments in more than 30 counties, including Collin, Dallas, Denton, Hood and Tarrant, telling them to give the state up-to-date water-use figures. The law behind the letters carries a $500 maximum fine.

📰 Today's News

1. 💧 Paxton Sends Water-Use Letters to 156 Data Center Developments in More Than 30 Counties

Paxton's office announced Thursday that it had sent letters to 156 data center developments. The letters say developers must give accurate, current information about their water use, Texas Scorecard and FOX 7 Austin reported. The office called it the latest step in an investigation it opened last month into projects that skipped the Texas Water Development Board's water-use survey.
FOX 7's list of counties includes five of the eight DFW-area counties we track: Collin, Dallas, Denton, Hood and Tarrant. Others include Harris, Travis, Bexar, Williamson, El Paso, Ector, Midland, Nueces and Ward.
"Data center developers must follow the law and respect the Texans and communities affected by their operations," Paxton said. His office didn't release the text of the letters.
FOX 7 reported that developments that don't comply could face fines and could be denied certain permits and renewals. The Texas Tribune's reporting this week sets the limits. Skipping the survey is a Class C misdemeanor with a maximum $500 fine. Paxton can't prosecute local cases unless a county or district attorney asks him to. TCEQ told the Tribune the law doesn't allow it to revoke or suspend permits that have already been issued.
The Tribune's records show 329 data centers were surveyed last year and about 30% responded. From 2020 through 2025, 233 of the 334 facilities on the board's list never filed a survey.
NOTUS reported that Democratic Senate nominee James Talarico has accused Paxton of being cozy with data center developers. Paxton faces Talarico on Nov. 3.

Today's Signal: The letters put more pressure on developers, but the enforcement tools haven't changed. A $500 fine and a permit hold that only applies at renewal won't stop a facility that's already running. Before the Legislature can raise the penalty in January, a county or district attorney would have to file a case.

2. 🏛️ Harris County Unanimously Orders Early Notice of Data Center Permits

Harris County commissioners unanimously approved three measures Thursday introduced by Precinct 4 Commissioner Lesley Briones, KHOU reported. County offices must now notify Commissioners Court when a major data center project submits a traffic impact analysis, a permit application or fire code plans.
The court also told staff to identify and push for changes to state law before the 90th Legislature, and asked County Attorney Abbie Kamin for a report on what authority the county already has. None of the three measures bans or pauses a project.
Officials said the county has 46 operating data centers and at least six more in development. Community Impact cited agenda documents counting 55 operating, under construction or planned. Kamin cited CenterPoint Energy projections of 8 GW of new data center demand in the Houston area by 2029, with about 4 GW more after that. She said that could raise peak demand in CenterPoint's territory by roughly 50%.
Kamin told Click2Houston the county generally can't use zoning to control where data centers go. Whether a county can impose a moratorium is still an open legal question, and she said the county is waiting for a determination from Paxton. Briones said the county is working with the Conference of Urban Counties on a legislative agenda.

Today's Signal: Harris County can't zone, so getting notice of a permit application early is about the only tool it has. Whether it can do more depends on Paxton's answer on county moratoriums. That answer would also apply to Hood, Ellis and every other county in a fight with a developer right now.

3. 🏗️ Two South Texas Campuses Move Forward on State Building Filings

Hut 8 has started construction on its Beacon Point campus at 4650 FM 1694, between Robstown and Calallen in Nueces County, the Corpus Christi Caller-Times reported Friday. Texas Department of Licensing and Regulation records put the cost of construction on the 525-acre site at nearly $399 million, and the Caller-Times reported completion is projected for November 2027.
KIII reported last week that the whole project is expected to cost $17 billion to $20 billion, with about 2,000 construction jobs and about 230 permanent ones. About 200 workers are on site now, and that should reach 1,000 early next year when work on the buildings starts. A Hut 8 project director said the campus would use municipal water only for basic needs like restrooms.
Corpus Christi's development services department is drafting an ordinance on where data centers can go inside city limits, KIII reported.
In Willacy County, Soluna filed with TDLR on Oct. 14 for Project Kati II, a single 471,884-square-foot, 112 MW building estimated at $471.8 million, Data Center Dynamics reported. The filing gave no construction timeline. The first phase of Kati I, 83 MW, finished in September. Kati I is powered behind the meter by the 273 MW Las Majadas wind project.

Today's Signal: TDLR registers buildings. It doesn't approve power connections or air permits, which are the approvals the governor's pause has stopped. Beacon Point is already under construction, and Kati II is planned next to a wind farm that already supplies its sister project. Both show that a campus with its own power, or with approvals in hand before the pause, can keep building through it.

4. 🗳️ Data Centers Are Now an Issue in the Agriculture Commissioner Race Too

The Texas Tribune reported Thursday that the race for agriculture commissioner has turned largely on data centers, even though the office has no say over them. Democrat Clayton Tucker calls Republican Nate Sheets "Data Nate." Sheets owns stock in Riot Platforms. Tucker owns Energy Transfer stock, and Energy Transfer has agreed to supply gas to a Cloudburst data center in Central Texas. Tucker said he would "probably" sell it.
Sheets told the Tribune he opposes tax abatements for data centers, wants some form of local control for county commissioners, and wants the companies to pay into water and agriculture funds. Tucker wants impact studies that would make data centers disclose the resources they use. A Texas Southern University poll last month had Sheets ahead by 6 points.
In the governor's race, Gina Hinojosa held a debate Thursday outside the Governor's Mansion next to an empty podium for Gov. Greg Abbott, who was campaigning in Tyler. The Washington Examiner reported that she vowed a moratorium on data centers while speaking in Austin. KXAN reported that a Texas Politics Project poll released Wednesday had Hinojosa at 49% and Abbott at 48%, and a Marist poll had Abbott up 4 points. Early voting starts Monday.

Today's Signal: Even candidates for an office with no role in data center permitting are campaigning on them, a sign of how much voters care. The Tribune cited a poll showing 62% of rural Texans oppose a data center in their community.

We found no new ERCOT news releases (the most recent is from Sept. 21), no PUC large-load docket actions, no TCEQ air-permit notices in the eight DFW-area counties we track, and no new zoning votes in those counties. We also found nothing new on a Sailfish lawsuit against Hood County, the details of Red Oak's rezoning, or the Water Development Board's update to the governor.

📍 Today's Watch List

Whether any county or district attorney files a Class C case against a data center that skipped the water survey, and how many of the 156 developments respond to Paxton's letters.
Paxton's opinion on whether Texas counties can impose data center moratoriums, plus the Harris County Attorney's report on the county's current authority.
The Water Development Board's enforcement update to Abbott's office, which was due Oct. 14 and hasn't been made public.
Early voting from Oct. 19 through Election Day on Nov. 3, in the governor's, Senate and agriculture commissioner races.
TCEQ's Oct. 19 compliance update and Bastrop County's request for a public meeting on the Pacifico gas plant.
Corpus Christi's draft data center ordinance and Beacon Point's push to 1,000 workers early next year.
A construction schedule for Soluna's Project Kati II.
Denton's Oct. 27 moratorium hearing and San Antonio's Oct. 29 council vote.
Whether Sailfish Investors sues Hood County, and the acreage and developer behind Red Oak's rezoning.
ERCOT's Dec. 10 audit reports and the PUC's Dec. 17 open meeting. Nothing material is expected there before December.